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Further information on Directors

Information on a number of regulations and processes relevant to Directors, and how these are addressed by Prudential, is given below.

Area   Prudential’s approach
Rules governing appointment and removal  
  • The appointment and removal of Directors is governed by the provisions in the Articles of Association (the Articles), the UK Corporate Governance Code (the UK Code), the Hong Kong Corporate Governance Code (HK Code) as appended to the Hong Kong Listing Rules (the HK Listing Rules) and the Companies Act 2006.
Terms of appointment  
  • Non-executive Directors are appointed for an initial term of three years.
  • Subject to review by the Nomination and Governance Committee and re-election by shareholders, it would be expected that Non-executive Directors serve a second term of three years.
  • After six years, Non-executive Directors may be appointed for a further year, up to a maximum of three years in total. Reappointment is subject to rigorous review as well as re-election by shareholders at the Annual General Meeting.
  • The Directors’ remuneration report sets out the terms of the Non-executive Directors’ letters of appointment in the Annual report on remuneration.
  • The Directors’ remuneration report sets out the terms of Executive Directors’ service contracts in the Annual report on remuneration.
  • Prudential is one of the UK’s largest institutional investors. The Board does not believe that this compromises the independence of those Non-executive Directors who are on the boards of companies in which the Group has a shareholding. The Board also believes that such shareholdings should not preclude the Company from having the most appropriate and highest calibre Non‑executive Directors.
  • The independence of the Non-executive Directors is determined by reference to the UK Code and HK Listing Rules. Prudential is required to affirm annually the independence of all Non-executive Directors under the HK Listing Rules and the independence of its Audit Committee members under Sarbanes-Oxley legislation.
  • For the purposes of the UK Code, throughout the year, all Non-executive Directors were considered by the Board to be independent in character and judgement and to have met the criteria for independence as set out in the UK Code.
  • All the Non-executive Directors are considered independent for the purposes of the Company’s Hong Kong listing, and each Non-executive Director provides an annual confirmation of his or her independence as required under the HK Listing Rules. The Company has considered David Law’s position and has deemed him to be independent from 1 July 2016, being the date one year following his retirement from PwC, for the purposes of the HK Listing Rules and HK Code.
  • There were no other material factors that were deemed to affect the Non-executive Directors’ independence.
Audit Committee experience and independence  
  • In relation to the provisions of the UK Corporate Governance Code and HK Listing Rules, the Board is satisfied that Ann Godbehere and David Law have recent and relevant financial experience.
  • The Board has determined that Ann Godbehere and David Law qualify as audit committee financial experts under the requirements of Form 20-F and that both Ms Godbehere and Mr Law are independent within the meaning of Rule 10A-3 under the Exchange Act.
  • The Board does not consider that Mr Law’s previous position at PwC affects his status as an independent Director for the purposes of the UK Code or in relation to his membership of the Audit Committee, under applicable Sarbanes-Oxley legislation.
Indemnities, protections and legal advice  
  • Subject to the provisions of the Companies Act 2006, the Company’s Articles permit the Directors and officers of the Company to be indemnified in respect of liabilities incurred as a result of their office.
  • Suitable insurance cover is in place in respect of legal action against directors and senior managers of companies within the Group.
  • Qualifying third party indemnity provisions are also available for the benefit of the Directors of the Company and certain other such persons, including certain directors of other companies within the Group.
  • Qualifying pension scheme indemnity provisions are also in place for the benefit of certain pension trustee directors within the Group.
  • These indemnities were in force during 2016 and remain so.
  • Directors have the right to seek independent professional advice at the Group’s expense.
Significant contracts  
  • At no time during the year did any Director hold a material interest in any contract of significance with the Company or any subsidiary undertaking.

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